Dentsu HQ in Japan
Dentsu has said it will cut 6,000 employees from its international operations in response to shrinking revenue amid the COVID-19 pandemic. The job cuts, which represent 12.5% of the Dentsu workforce, will take place through the end of next year.
As part of the cost-cutting initiative, Dentsu will also consolidate international businesses by integrating 160 brands into six global brands over the next two years. The agency said it will announce specific subsidiaries to be eliminated by the integration at a later date. The expected annual cost savings from the restructuring and job cuts are expected to save the agency $530 million from the end of 2021.
The news comes after Dentsu forecast a consolidated COVID-driven net loss of $227 million for 2020.
Dentsu said it is looking at options for domestic operations, including potential staff cuts. In November it launched a voluntary early retirement program for employees 40 and older.
The effect of the job cuts in the overall APAC region is not yet known, with Dentsu saying that cost-cutting strategies would vary by market.
Back in May, following a downturn from the global pandemic along with underperformance in territories such as Australia and China, Dentsu announced cost cuts of seven percent globally.
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